The Value Proposition of Higher Education - Leadership

The Value Proposition of Higher Education

BACKGROUND

In her article, The American Dream and Higher Education's Broader Purpose, Lynn Pasquerella, president of the Association of American Colleges & Universities, writes, "[the] broader purpose of a college or university education extends beyond its market value." Pasquerella goes on to cite philosopher Mark Kingwell, who suggests, "When it comes to valuing education, no ratings system or outcomes table can actually penetrate the mystery of why learning is good."

However, in the article, Exploring the Value Proposition of Higher Education, the Association of Governing Boards (AGB) notes, "Headlines show that, for many people, higher education isn't measuring up." The cost of tuition continues to rise, and the resulting student loan debt continues to mount. Questions about higher education's cost and return on investment abound. Even those who believe in the importance of a college degree express concerns about whether they will be able to afford to send themselves and their children to college.

In its publication, Top Ten Policy Issues for Higher Education: 2017-2018, AGB goes on to suggest that deteriorating public confidence in higher education and growing skepticism about its fundamental value "may be reflected in the erosion of public financial support for colleges and universities." In nearly every state, funding for higher education remains far below prerecession levels (Figure 1 and Figure 2). According to the Center on Budget and Policy Priorities, these deep cuts in state funding have had major consequences for colleges and universities. Notably, "public colleges and universities across the country have increased tuition to compensate for declining state funding and rising costs." Additionally, because tuition increases cannot be relied on to fully compensate for the revenue lost as a result of declining state funding, "public colleges and universities have cut faculty positions, eliminated course offerings, closed campuses, and reduced student services, among other cuts."

In the face of growing questions about value, the AGB states, "The message is clear: Colleges and universities and their leaders--including board members--must redouble their efforts to define, defend, and extol the value proposition of higher education."

THE PERSONAL AND PUBLIC VALUE OF HIGHER EDUCATION Lifetime Earnings and Benefits People with more education typically earn more. According to the 2011 report, The College Payoff, median lifetime earnings rise steadily for workers with increasing education attainment (Figure 3). Having some postsecondary education, even without earning a degree, adds nearly one-quarter of a million dollars to lifetime earnings. Bachelor's degree holders earn 31% more than workers with an Associate's degree and 74% more than those with just a high school diploma. Figure 3. Median lifetime earnings by highest educational attainment, 2009 dollars

However, using median earnings obscures persistent variation in earnings within educational levels. For example, women with the same educational attainment as men earn about a quarter less than their male counterparts over a lifetime (Figure 4). There is also variation in the earnings of people of different races/ethnicities relative to Whites (Figure 5).

Figure 4. Male and female earnings by educational attainment Figure 5. Lifetime earnings by race/ethnicity, 2009 dollars

Education significantly increases the ability of children to move up the economic ladder. The 2012 report, The Economics of Higher Education, cites data indicating that education enhances intergenerational mobility, the ability of children to move up and down the economic ladder independent of their parents' income status (Figure 6). Figure 6. Intergenerational mobility

The financial benefits extend beyond income. According to the Lumina Foundation, on average in 2012, Americans with bachelor's degrees (and without graduate degrees) receive the following benefits in comparison to high school graduates never attending college:

? The incidence of poverty is 3.5 times lower. ? Retirement income is 2.4 times higher. ? The probability of being employed is 24% higher. Civic Learning and Engagement Colleges and universities create informed, engaged citizens. According to a number of reports, making civic learning and democratic engagement an expected outcome helps meet the demands of employers (Figure 7, A Crucible Moment: College Learning & Democracy's Future) and fosters informed, engaged, responsible citizens (Table 1, What's a Degree Got to Do With It? The Civic Engagement of Associate's and Bachelor's Degree Holders). Additionally, the Lumnia Foundation points to significantly increasing generosity (in absolute terms as well as in percentages of earnings) from increasing college attainment (Figure 8).

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